2011 Trends to Watch: Utilities Technology

Date: October 22, 2010
Pages: 21
Price:
US$ 1,895.00
Publisher: Ovum
Report type: Brief Review
Delivery: E-mail Delivery (PDF)
ID: 23AAAAC3BBFEN
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2011 Trends to Watch: Utilities Technology
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Introduction

The pace of change in the utilities industry, while slow in comparison with some other industries, is increasing rapidly. Pressure is coming from all sides in the shape of environmental concerns, aging infrastructure, market liberalization, scarcity of resources, increasing fuel costs, a rapidly aging workforce, and increasing payment defaults caused by the economic downturn.

Features and benefits
  • Gain insight into the business trends that Ovum believes will characterize the utilities sector in 2011.
  • Understand the technology enablers that will help utilities achieve their operational objectives.
Highlights

As these business processes change, so does the technology that supports them. Smart grid and smart meter investments are cornerstones of the technology solutions to many of the above problems. However, the investment in technology required by utilities does not end there.New billing engines and customer relationship management systems are needed, while business intelligence and analytics can help a utility across the entire value chain to save costs and help drive business growth, and knowledge management systems can help a utility battle against the problems of an aging workforce.

Your key questions answered
  • What will utilities need to do in order to remain competitive in 2011 and beyond?
  • What major issues are on the agenda for utility CIOs in 2011?

SUMMARY

Catalyst
Ovum view
Key messages

BUSINESS TRENDS AND TECHNOLOGY ENABLERS

There are many drivers and barriers shaping the prospects of organizations in the utilities industry

UTILITIES ARE UNDER PRESSURE TO HELP DRIVE ENERGY EFFICIENCY

Environmental concerns force utilities to cut carbon emissions, while demand for resources increases
Environmental concerns have led governments and regulators to reduce carbon emissions
Utilities are facing an unprecedented demand on resources, particularly electricity and water
Deployment of smart technologies will accelerate in 2011 to help reduce demand
Smart grid technologies decrease GHG impact through increased volumes of renewable energy and energy storage
Smart metering overcomes scarcity of resources by influencing customer behavior
Customer information systems must adapt for smart meter data

CAPITAL-CONSTRAINED UTILITIES MUST IMPROVE COST MANAGEMENT

Utilities suffer from the combined effect of increasing infrastructure costs and bad credit
Future capital expenditure in infrastructure is vast
The high cost of fuel puts pressure on utility retail prices and forces cuts in operating costs
The economic downturn has increased rates of payment defaults
Technology helps utilities improve cost management
Smart metering enables more sophisticated payment protection, reducing cost-to-serve
Smart metering reduces cost-to-serve in the call center

UTILITIES MUST DO MORE TO IMPROVE OPERATIONAL EFFICIENCY

The aging of both infrastructure and workforce is the biggest threat to operational inefficiency
Infrastructure assets can be more than 50 years old
An aging workforce will see a large proportion of utility staff retire over the next 10 years
Technology will continue to play a vital role in helping utilities do more with less
Smart grid technology improves the efficiency of delivery networks
BI and analytics will help utilities to optimize business processes
Knowledge-management and collaboration tools will help utilities manage the problems of an aging workforce

CREEPING LIBERALIZATION FOCUSES UTILITIES ON THE CONSUMER

Market liberalization is coming, albeit slowly
Greater customer insight can give utilities competitive advantage in liberalized markets

ACHIEVING THE INVESTMENT REQUIRED OVER THE NEXT 10 YEARS REQUIRES A WEAKENING OF UTILITIES’ INNATE CONSERVATISM

(Untitled section)
Utilities have not traditionally been active outsourcers
AMI will be a key driver for a future increase in outsourcing opportunities

RECOMMENDATIONS

Recommendations for enterprises
Smart meters are coming - make sure you are well prepared
Business intelligence and analytics will help drive efficiency and business growth, but only if utilities are prepared
Outsourcing is an option to free up capital
Recommendations for vendors
Help your clients navigate through the smart technology minefield
Work with clients to investigate how alternative ownership models can deliver value

APPENDIX

Further reading
Methodology
Definitions
Author
Ovum Consulting
Disclaimer

TABLES

Table: Business trends and technology enablers for utilities in 2011
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